Apple predicted to countersue in legal battle with Nokia

Posted:
in iPhone edited January 2014
Following Nokia's lawsuit against Apple for alleged patent infringements in the iPhone, experts have said it would be standard practice for Apple to countersue in the case, which is predicted to last 2 to 3 years.



A new report from Reuters said that the most likely scenario for both companies to not be engaged in a lengthy suit is if they can reach a licensing deal outside of the courts. But analysts believe it is likely that Apple will countersue Nokia for its own patents and allege separate infringement.



"This type of tit-for-tat approach has occurred in previous patent battles as each player tries to improve its negotiating position," said Ben Wood, research director at CCS Insight.



In addition, the report said that the fight between the two massive companies could become even more complex, spilling over to Europe like the Nokia-Qualcomm battle, and possibly ending up in the hands of the U.S. International Trade Commission. The original complaint was filed in October in a U.S. District Court in Delaware. That case, experts said, could be stayed until an ITC decision.



Nokia has alleged that Apple violated ten patents it owns. Nokia claims ownership of technology related to Global System for Mobile communications (GSM); wireless local area network (WLAN); and Universal Mobile Telecommunications System (UTMS). The Finnish company has argued that it has invested more than 40 billion Euros into research and development in the last two decades, giving it a broad portfolio of patents. The company has entered into license agreements with about 40 companies for these patents.



Nokia's suit specifically cites 10 patents that cover wireless data, speech coding, security and encryption. It has alleged that all iPhone models released since 2007 infringe on these patents.



Analyst Gene Munster with Piper Jaffray has predicted that Nokia is looking to obtain a patent royalty of 1 percent to 2 percent, or $6 to $12, on every iPhone sold. Other estimates cited by Reuters suggest Nokia seeks compensation in the range of $200 million to $1 billion.



Though Apple's formal response, and potential countersuit, is expected soon, the company has not yet made any moves. Apple did, in its annual Form 10-K filing with the U.S. Securities and Exchange Commission, note that it will "vigorously" defend itself against Nokia's complaint.



Analysts who spoke with Reuters said a settlement might be the best option for both companies. The situation is particularly difficult because it is said to be "unlikely" a company could create a mobile phone without using Nokia-patented technology. And Nokia doesn't want to "kill the goose with the golden egg" either, said Steven Nathasingh, managing director of U.S. research firm Vaxa Inc.



"They both have something to gain if they can put their heads together for a win-win," he said.
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Comments

  • Reply 1 of 41
    pmzpmz Posts: 3,433member
    This will be another example of the early bird losing the worm later on, when the judge decides that Nokia cannot continue to claim patents on every aspect of mobile communication.
  • Reply 2 of 41
    gazoobeegazoobee Posts: 3,754member
    Quote:
    Originally Posted by AppleInsider View Post


    ... The Finnish company has argued that it has invested more than 40 billion Euros into research and development in the last two decades, giving it a broad portfolio of patents. ...



    Just to be picky, you guys have used this phrase in two stories on the subject now and it's pretty much nonsensical.



    Nokia *has* put 40 billion into R&D and it *does* have a wide patent of portfolios, but this is not their "argument" nor can it be. Those are just two facts, the argument they have has yet to be presented other than the plain fact that they think Apple infringes on those patents.
  • Reply 3 of 41
    teckstudteckstud Posts: 6,476member
    Quote:
    Originally Posted by Gazoobee View Post


    Just to be picky, you guys have used this phrase in two stories on the subject now and it's pretty much nonsensical.



    Nokia *has* put 40 billion into R&D and it *does* have a wide patent of portfolios, but this is not their "argument" nor can it be. Those are just two facts, the argument they have has yet to be presented other than the plain fact that they think Apple infringes on those patents.



    Are you what's considered "a stickler for details"?
  • Reply 4 of 41
    richlrichl Posts: 2,213member
    There's a surprisingly informative analysis of this dispute over at Engagdet. It's definitely worth a read.
  • Reply 5 of 41
    Quote:
    Originally Posted by Gazoobee View Post


    Just to be picky



    If you are a jobless lawyer, consider yourself hired very soon.
  • Reply 6 of 41
    quadra 610quadra 610 Posts: 6,743member
    Well obviously.
  • Reply 7 of 41
    ajitmdajitmd Posts: 365member
    http://seekingalpha.com/article/3510...re-of-qualcomm

    http://www.sramanamitra.com/2008/05/...-and-qualcomm/



    Apple is already paying close to $50/phone to the IPR holders for the use of UMTS/3G and GSM. Almost 10% of the phone price! I doubt that Apple went into the business without securing all licenses including Nokia. I suspect Nokia got seller's remorse and wants to jack up the royalties now that the iPhone is a big winner. Nokia also gets royalties from the chip suppliers.



    Actually the current 3G/UMTS/WCDMA tech was based on QCOM's version of CDMA. Nokia and Ericsson first denied it would work. Then they went to court to nullify but lost... I remember it because I was holding a pile of the stock back in 98-99. In the end Nokia and the GSM cabal created UMTS to dilute QCOM patents and royalties.



    I see big chance of Nokia loosing in court... Apple needs to make a example of them.
  • Reply 8 of 41
    Quote:
    Originally Posted by teckstud View Post


    Are you what's considered "a stickler for details"?



    He is what some might consider: Informed and divorced from rabid Apple fanboism.
  • Reply 9 of 41
    Quote:
    Originally Posted by RichL View Post


    There's a surprisingly informative analysis of this dispute over at Engagdet. It's definitely worth a read.



    Great article RichL. This has been circulated around for week or so but it pretty much sums it up. My friends in Commerce feel that Nokia has a leg to stand on because they are not going after the entire spectrum of IPR but very specific, easy to prove technologies. No matter who wins, the customer will not gain anything and the lawyers will continue their reign of terror on the justice system.
  • Reply 10 of 41
    Think Nokia are some sort of deal where apple licenses some of apples patents to nokia in exchange for letting apple continue to use the ones they are suing over??
  • Reply 11 of 41
    Quote:
    Originally Posted by Mitch1984 View Post


    Think Nokia are some sort of deal where apple licenses some of apples patents to nokia in exchange for letting apple continue to use the ones they are suing over??



    Or they can let it play out, Nokia wins, Apple loses. Apple pays and then has to pay to license the technology. Now this would really suck for Apple.
  • Reply 12 of 41
    ajitmdajitmd Posts: 365member
    Quote:
    Originally Posted by RichL View Post


    There's a surprisingly informative analysis of this dispute over at Engagdet. It's definitely worth a read.



    Apple buys components from companies like Infineon, Broadcom that already license pay royalties to the IPR holders like QCOM, Nokia, etc. I read that there is an additional $50/iPhone that Apple pays to the patent holders.



    Anyway, Apple could buy the whole GSM/3G/WiFi module and just incorporate in the iPhone. Why should they have to pay additional royalties? Does a laptop manufacturer who sells a laptop with a WiFi card have to pay royalties on the whole laptop? Double dipping???



    AnI smell a rate here. That endgadget article sounds like one written by Nokia shills... they like to use them.
  • Reply 13 of 41
    Don't the companies that manufacturer the chips Apple uses in building an iPhone already pay for the patents on the technologies those chips incorporate? Or does Apple have some custom chips in the iPhone that they've designed that use the technologies in these patents?
  • Reply 14 of 41
    Quote:
    Originally Posted by Gazoobee View Post


    Just to be picky, you guys have used this phrase in two stories on the subject now and it's pretty much nonsensical.



    Nokia *has* put 40 billion into R&D and it *does* have a wide patent of portfolios, but this is not their "argument" nor can it be. Those are just two facts, the argument they have has yet to be presented other than the plain fact that they think Apple infringes on those patents.



    Just to be picky: corporate finance accounting is *always* an argument (nothing to do here with legal argument). And there is *nothing* in AI's quote suggests that Nokia doesn't have a wide patent portfolio.
  • Reply 15 of 41
    While Nokia is tied up in court with Apple, the battle will go on for years and Apple will merrily continue with business as usual.
  • Reply 16 of 41
    teckstudteckstud Posts: 6,476member
    Quote:
    Originally Posted by sapporobabyrtrns View Post


    He is what some might consider: Informed and divorced from rabid Apple fanboism.



    I will only grant you the former part of your description when it comes to Gazoobee.
  • Reply 17 of 41
    Quote:
    Originally Posted by Quadra 610 View Post


    While Nokia is tied up in court with Apple, the battle will go on for years and Apple will merrily continue with business as usual.



    And what? Do you think Nokia will close down and move to the US? My God, how myopic a sentiment. Nokia will continue on as well. This is what they do.
  • Reply 18 of 41
    Quote:
    Originally Posted by AjitMD View Post


    Apple buys components from companies like Infineon, Broadcom that already license pay royalties to the IPR holders like QCOM, Nokia, etc. I read that there is an additional $50/iPhone that Apple pays to the patent holders.



    Anyway, Apple could buy the whole GSM/3G/WiFi module and just incorporate in the iPhone. Why should they have to pay additional royalties? Does a laptop manufacturer who sells a laptop with a WiFi card have to pay royalties on the whole laptop? Double dipping???



    AnI smell a rate here. That endgadget article sounds like one written by Nokia shills... they like to use them.



    The funny thing about this entire thought process that if the shoe was on the other foot, it would be. Go get them Apple. Sue, sue, sue, but the moment it looks like Apple screwed the pooch and it really does, suddenly Apple can do no wrong.



    So what if Apple pays patent holders. If they haven't paid Nokia, Apple has a problem and should be sued. It is that simple. Where have I seen the same kind of thinking? I know....
  • Reply 19 of 41
    Quote:

    This type of tit-for-tat approach has occurred in previous patent battles as each player tries to improve its negotiating position



    Clarification: This type of tit-for-tat approach has occurred in every single patent battle of note. Saying that Apple is likely to counter-sue is akin to saying that on Monday night, I expect Pittsburgh to take the ball and try to score after each Bronco drive.



    About the only time you don't see counter-suits, is when Patent Trolls are involved, because they do no research and produce no products, which gives them effectively zero exposure.
  • Reply 20 of 41
    richlrichl Posts: 2,213member
    Quote:
    Originally Posted by AjitMD View Post


    Apple buys components from companies like Infineon, Broadcom that already license pay royalties to the IPR holders like QCOM, Nokia, etc.



    I don't think it's that clear cut. It depends on who owns the modem design. Is it an off the shelf component or was it a custom design owned by Apple, ala what console manufacturers do with their CPU/GPUs? Don't forget that these patents could also cover low-level software too. I don't know enough about the iPhone's internals to comment.



    Quote:

    AnI smell a rate here. That endgadget article sounds like one written by Nokia shills... they like to use them.



    Got any proof to back up that claim or are you basing it solely on the fact that you don't agree with the laywer/writer's conclusion?
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